Why the cold war over 'copycat' branding may be set to heat up

10 April 13, by
Matthew Chapman

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The balance of power could be about to swing in "copycat" packaging disputes after years of brand owners being the whipping boys, writes Matthew Chapman.

Although the issue of so-called copycat packaging has existed for many years, tensions between brand owners and retailers have bubbled under the surface with high-profile disputes rarely appearing in the public domain.

The last case to reach the public glare was between Sainsbury's and Diageo in 2009, and revolved around a copycat version of Pimms. However, the growing prospect of greater protection from UK and European lawmakers means more brand owners may be emboldened to break cover in the future.

Last month, the European Commission revealed it will support stronger enforcement action on copycat packaging that misleads consumers, while a Government investigation into copycat practices in the UK is on the horizon.

Liberal Democrat MP Jo Swinson responded to a question in Parliament by revealing that the Intellectual Property Office's long-delayed research into FMCG packaging and "the impact of lookalikes" is due to be published this spring.

A deeper delve into the issues surrounding packaging has been held back until publication of the research, claims the lobbying movement British Brands Group.

Intellectual property advocates believe that for too long, the Government has sat back and allowed one of the cornerstones of the UK economy to be eroded. Paul Rawlinson, partner at law firm Baker & McKenzie, argues that in the UK "there is a lack of leadership in looking at intellectual property and the brand industry as a subset of that".

He adds: "People talk about the UK's economy being built on intangible assets, so it is a bit of a mystery why intellectual property does not get as much airtime as it should at the highest level of government."

Landmark decision

Rawlinson was responsible for helping to change the law by winning a trademark infringement case that L’Oreal pursued against cosmetics company Bellure, which concluded with a decision in the European Courts of Justice in June 2009.

The landmark case means British brands can now take action if they believe a retailer is riding on the coat tails of a brands' reputation, rather than having to rely on the "passing off" law.

Passing off traditionally has required a high burden of proof, as the brand owner has to prove the consumer was confused at the point of purchase. Until now this has proved nigh on impossible in the UK courts.

Although Rawlinson admits the law has improved following the L’Oreal case, he believes it should be easier to enforce "unfair competition" in the UK.

Richard Kempner, a partner at Kempner & Partners, argues the L’Oreal case "moved the law quite heavily in favour of brand owners". He believes there is no recourse for further action because the "rights brand owners were always seeking are now there and they are not being exercised because retailers are not infringing them".

What both Rawlinson and Kempner are in agreement on is that the delicate nature of the relationship between a manufacturer such as P&G and Unilever, and retailers who are the brand owners' biggest customers, means it is rare legal disputes are carried through to the courts.

Rawlinson believes brands are "scared" to take on the retailers because of their selling power and, consequently, many disputes are dealt with behind closed doors.

Moral compunction

Disregarding the legal issues involved in copycat packaging, some argue that retailers should have a moral compunction to create their own brands rather than imitate others.

He argues: "If people are allowed to mimic the leading brands very closely, it is giving them an advantage and potentially legitimising a form of behaviour that although not technically illegal, is certainly morally dubious."

However, retailers deny any wrongdoing. Boots and Tesco both told Marketing they work hard to ensure all products comply with intellectual property law, and claim own-brand products are designed with their customers' best interests at heart.

A Boots spokeswoman explained that "colourways" used in its own-brand products are "synonymous with certain active ingredients and so are an important cue in helping a customer navigate through their choices".

Boots points out its customers do not shop by visual appearance alone, but also consider "price comparison, brand loyalty, promotions and advice from trained store colleagues".

However, the brand owners are dubious of the motives of the retailers, with British Brands Group director John Noble hitting out at "unregulated" copycat practices.

Noble said: "There is clearly an advantage to a copier doing this, a disadvantage to the consumer because they are misled, and a disadvantage to the original company who is investing in the reputation in the first place, because their costs increase and their revenues fall. It is fairly clear who are the winners and losers."

Whether the consumers are truly at a disadvantage is the key issue in the whole debate and until that is proved, or the Government decides to do more to protect intellectual property, it is the brand owners who will continue to be on the losing side.

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